Economy

India draws up plan to gain from US-China trade war

Amiti Sen New Delhi | Updated on June 16, 2019

Centre identifies categories in which exports can be raised

With the US-China trade war intensifying, India is keen to increase its market share in both countries and has carried out a detailed analysis identifying items where there is potential to increase exports.

In a recent study, the Commerce Ministry has identified 203 products where exports could be increased to the US, replacing Chinese goods, and 151 items where exports to China could rise.

“The list of items where exports from India can be increased to the US and Chinese markets will be shared with the respective line Ministries and Departments and industry organisations so that sectoral plans can be made. India will also bilaterally seek more access for these products from the US and the Chinese governments by asking them to remove non-tariff barriers wherever they exist,” a government official told BusinessLine.

Per the analysis, there are at least 203 lines where India has the potential to replace Chinese exports to the US as it already has market access for these items and is a competitor of China. Since the US has increased tariffs for China on these items, it would be easy for India to increase exports. These items include electrical machinery and equipment and base metals and articles.

US imports from China of these items are worth $30.6 billion, while India’s exports to the US are only worth $2.4 billion. The fact that India has the capability of increasing exports to the US is evident from the fact that India’s total exports of these items to the world are worth $22.2 billion.

A number of agricultural items and chemicals, too, have the potential for greater export to the US.

In the case of China, where different levels of retaliatory tariffs have been imposed on US goods, the Commerce Ministry has carried out a commodity-wise analysis. “The specific lines in which India can potentially expand exports to China immediately ... and also those in which concerted efforts need to be made to acquire market access have been identified,” the official said.

The outright advantage

Of the items on which 25 per cent duty has been levied by China on the US, India has the outright advantage to displace US exports to China in 47 lines as it is a strong exporter of these items, according to the analysis. These include some chemicals, granite, inverters, copper ore and concentrates.

Of the items on which China has imposed 10 per cent duty on the US, there are 29 lines in which India is a strong exporter and can displace the US. The top lines include chemicals, equipment for transmission of voice/data in a wired network and tubes and pipes and hoses of vulcanised rubber.

Of the items imported from the US on which China has imposed retaliatory tariffs of 5 per cent, India can displace US exports for 25 lines, including engines, diesel, x-ray tubes and some antibiotics.

Published on June 16, 2019

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